Exploring a VUCA environment and how it impacts a company

The term VUCA is used when advances are so swift, planning can go astray. (Rawpixel pic)

The managements of many businesses may feel they are alone in dealing with the recent economic turmoil, but everyone is in one way or another. The question that should be asked now is how the environment affects a business.

The term VUCA is a tool to start reflecting upon the current complex scenario, how to approach it and what should be done to adapt to it.

By the end of the Cold War, the US started to use the term VUCA to refer to the new reality and to try to think of some answers in such a context.

The acronym stands for:

  • (V) Volatility
  • (U) Uncertainty
  • (C) Complexity
  • (A) Ambiguity

It is usually applied to assess complex environments where tasks may vary and change as fast as the environment around them.

This term was first used in the business world after the economic crisis of 2008. In these days, it is mostly used when technological advances move so speedily that any planning goes astray, forcing companies to introduce quick, radical changes into their management decisions.

This can be portrayed in different contexts, regardless of the field: services, industry, production and technology.

VUCA scenarios

Two of the most common ways to carry out a business strategy are bringing knowledge and predictability into play, two issues that are becoming increasingly difficult to achieve.

If the context is analysed using the VUCA concept, different scenarios come up, each with its own feature and its own approach.

In order to define these contexts, a matrix results in a four-option chart is used. According to the level of predictability or knowledge about each situation, there will be a different type of specific scenario.

How to face a context with these characteristics

Each scenario requires a different strategy.

Each scenario means a different approach strategy. For instance, if the scenario is volatile, a very clear vision about what needs to be done is needed, and the whole team has to share the management mission. What this means is trust: saying what will be done and doing it as agreed.

If uncertainty is found, it is key to face this scenario with some understanding. Slowing down, assessing variables and reducing a lack of information – getting everyone involved and welcoming their participation.

In a complex scenario, clarity is needed to make the proper decisions counting on all the information available. Everyone needs to be straightforward and honest to build a reliable, collaborative environment.

And finally, in a case of ambiguity, it is necessary to work as from agility, focusing on the work team, getting everybody involved and communicating well internally to be able to adapt to changes very quickly.

How? Through communication and commitment: seeking mutual understanding, exploring possibilities.

It is important to find guidance, take on responsibilities but mostly to empower people.

The strength of the freelancer in the VUCA scenario

Technological advances have pushed companies to solve increasingly changing problems quickly and efficiently.

In such a context, remote workers can usually face these challenges and make the most of them.

They can be hired to solve a specific need, bring about new trends and promote agility or response speed. The Freelancers Directory provides information on all the categories of freelancers.

Final conclusions

Now that it is clear what the VUCA scenarios are about, different strategies must be devised to survive, adapt, stand out or get scaled up. Create and conceptualise a business with this vision about contexts. What can be done to get scaled up? Are the right strategic decisions being made to adapt to a new scenario?

*This article is a collaboration with Elena Ficher, industrial designer and freelancer at Workana.

Click here to find out more about Workana to start hiring or enlisting as a freelancer.